Exclusive Report: Wages, Income Nudge Forward in Parts of South Carolina
Tuesday, December 18th, 2018
Wage growth has been on an upward trend nationally for most of the year. In South Carolina, it depends largely on where you live.
A recent survey by Allianz Life Insurance Co. revealed that 23 percent of Americans were concerned by stagnant wages, compared to 30 percent in 2017. Among millennials, 29 percent had wage concerns, compared to 37 percent last year.
A tracker produced by the Federal Reserve Bank of Atlanta put wage growth at 3.7 percent for October. That’s up from 2.9 percent in February and close to the post-recession high of 3.9 percent in October and November of 2016.
Wage growth still hasn’t rebounded to the 4.0 percent rate seen in November 2008. That stubbornness comes despite falling unemployment rates.
“We have fewer unemployed than we have jobs that are open,” said University of South Carolina research economist Dr. Joseph Von Nessen during a recent presentation. Typically, that scarcity should drive wages higher. “Economists don’t have a good explanation for this.”
Von Nessen pointed to three possibilities.
“Unemployment may be higher than it initially appears,” he said, citing the labor participation rate as potentially creating slack in the labor market.
Nationally, the U.S. Bureau of Labor Statistics puts the rate at 62.9 percent for November. It has hovered between 63.0 percent and 62.7 percent since December 2015. It was 66.2 percent in January 2008.
The labor participation rate was 57.3 percent for South Carolina in October.
Von Nessen also pointed out that productivity growth has been slow during the recovery.
“Productivity is highly correlated to wage growth,” he said.
Manufacturing is a wage-growth leader in South Carolina and productivity was strong nationwide from the 1990s until 2004. Since then, manufacturing productivity has slowed.
Thirdly, Von Nessen said signing bonuses are becoming more common. He said it’s a way to avoid raising base wages, which might have to be subsequently cut during an economic downturn.
He said the highest wage gains are in the coastal areas of the state, with the Myrtle Beach and Charleston metros leading the way.
The U.S. Census Bureau recently released median household income data in South Carolina counties, comparing 2008-2012 with 2013-2017. For areas with smaller populations, such as rural counties in South Carolina, the Census Bureau pools together several years of data to create a more precise estimate.
Adjusted for inflation, median household income was up in Lowcountry and coastal counties such as Berkeley, Charleston, Dorchester, Georgetown and Horry when comparing the two periods. Overall, median household income was up in 25 counties but down in 21.
“Our population is aging and we also have a significant number of baby boomers inmigrating,” Von Nessen said in an interview with South Carolina CEO. “It’s possible that part of that trend would be a drop in total income.”
Household income includes not only wages, but also pension and retirement income, as well as transfer payments such as Social Security.
Chesterfield and Williamsburg counties saw their median household income rise the most, by 14.8 percent. Hampton (down 15.9 percent) and Allendale (down 14.7) lost the most ground.
The statewide annual median household income rose to $48,781, up 2.3 percent. The highest median household income was in Beaufort County ($60,603), while Allendale had the lowest ($23,331).